by Pavas Gupta
Last week, as trade tensions eased down, the Indian economy saw a boost in its industrial production, while being termed ‘an elephant that’s starting to run’ by an IMF official. Simultaneously comes news of PepsiCo’s Indra Nooyi’s descension, and a national currency crisis in Turkey. Read on for details:
PepsiCO CEO Indra Nooyi to step down
After 12 years of holding down the fort at food and beverage giant PepsiCO, Indra Nooyi will step down as Chief Executive Officer (CEO) in October. Nooyi’s tenure was highlighted by efforts to adapt to ever-changing consumer tastes and fend the company against pressure from activist investors.
President Ramon Laguarta, 54, will take over the helm effective Oct. 3, cementing his position as Pepsi’s sixth CEO. Meanwhile, Nooyi will continue her tenure as Chairman until early 2019.
According to figures released by FactSet, Pepsi’s stock cumulatively gained 79% since Nooyi’s ascension in October 2006. Its net revenue also grew from $35 billion in 2006 to $63.5 billion in 2017.
IMF: India’s Economy is elephant that’s starting to run
Per reports by the International Monetary Fund (IMF), India is all geared to retain its position as one of the world’s fastest-growing economies as reforms start to show returns.
Ranil Salgado, the IMF’s mission chief for India, described the $2.6 trillion economy as an elephant starting to run. His claims are backed by growth forecasts at 7.3% in the fiscal year through March 2019, and 7.5% the year after. According to the Fund, India accounts for about 15% of global growth.
However, the IMF did flag some risks that could deter this growth trend: higher oil prices, tightening global financial conditions and tax revenue short-falls. Authorities should take advantage of stronger growth to bring down debt levels, simplify the consumption tax system and continue to gradually tighten monetary policy, the global Fund said.
Turkey’s Erodgan urges Turks to buy lira
The lira – Turkey’s fiat currency – has lost its value by a third this year. In the wake of such acute depreciation, President Tayyip Erodgan, on Friday, called on his fellow Turks to exchange gold and hard currency into lira, terming Turkey’s currency crisis a “national battle” against economic enemies. After his comments, the lira was trading at 6.05 to the US dollar, nearly 9% weaker. “The dollar cannot block our path. Don’t worry,” Erdogan assured a crowd.
Earlier on Friday, the lira plunged 14% as reservations regarding Erodgan’s influence over monetary policy and worsening relations with the US snowballed into a market panic, also hitting scores of European banks.
Erodgan claimed that Turkey was facing artificial financial volatility, and that increasing production, exports and employment was the best response to the country’s challenges.
Industrial production at a 5-month-high of 7% in June
Industrial production in three of India’s major sectors – manufacturing, mining and electricity – expanded at a 5-month-high, contributing to the economy’s recovery. Growth as measured by the Index of Industrial Production (IIP) stood at 7% in June compared with 3.9% in May, according to data released by the statistics office on Friday .
RBI to pay Rs 50,000 crore dividend to government
On Wednesday, The Reserve Bank of India (RBI) decided to pay Rs 50,000 crore as dividend to government in line with the Union Budget provisions, thereby helping the Centre stick to its fiscal roadmap for 2018.
The Reserve Bank, which follows July-June financial calendar, has paid about a 63% higher dividend than previous year (2016-17). The RBI made a dividend pay-out of Rs 30,659 crore for the fiscal that ended in June 2017.
Pavas Gupta is a writing analyst at Qrius
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